EXPLAINER: How to claim a child tax credit $ on your taxes | Economic news
By FATIMA HUSSEIN, Associated Press
WASHINGTON (AP) — Millions of Americans who have never filed taxes will need to do so this year in order to claim what is rightfully theirs under the enhanced child tax credit.
Previously, only people who made enough money to owe income taxes could get the full credit.
But as part of the $1.9 trillion coronavirus relief package, President Joe Biden has expanded the program, increasing payments up to $3,600 a year for each child age 5 or younger and 3 000 dollars for those aged 6 to 17.
Monthly payments amounted to $300 for each child 5 and under and $250 for those between 5 and 17.
The government began sending the payments – a total of $93 billion – on a monthly basis from last July. Now there are six more months of payments waiting to be claimed. And some families have not yet received any of the benefits due to them. In total, an estimated $193 billion has yet to be claimed.
The only way to receive this money is to file a tax return.
Some questions and answers about who qualifies for the credit and how to get it:
WHO BENEFITS FROM THE CHILD TAX CREDIT?
More than 36 million families received the advance payments in December alone, which marked the last month that monthly advance payments were sent to households. Families are eligible for the full credit if their adjusted gross income in 2021 was equal to or less than $150,000 for married couples filing jointly, or $75,000 for single parents.
HOW DO I KNOW IF I AM ELIGIBLE AND WHAT IF I DON’T OWER TAX?
Whether or not a family owes money in taxes or has already filed taxes, they will need to file a return to get all or the rest of their money.
Eligible families who did not receive any child tax credit advance payments in 2021 can still claim the full amount of the child tax credit on their federal tax return. Families who are unsure if they have received payments, or if they have potentially received paper checks that have not been cashed, can visit the Child Tax Credit Update Portal to see the amount of the credit they should have received.
In addition, families who received payments should have received a “Letter 6419, 2021 CTC Advance” notice, which includes information about the amount of advance payments families received and tax information for filing purposes.
However, the IRS said some people may have received incorrect information on their forms. The portal can help people who want to confirm the exact amount they should have received. Despite any inconsistencies in the documentation, the IRS advises taxpayers to keep the letter and any other communication from the IRS regarding the prepayments with their tax records.
WHAT IS THE BEST WAY TO DEPOSIT?
The IRS is urging individuals to file their taxes electronically to process forms faster, and provides links on the agency’s website to free filing sites like GetYourRefund.org, which helps families earning less than $66,000 a year or so to file their taxes for free. The organization partners with IRS-certified volunteer income tax assistance and provides free assistance in English and Spanish. Another option is MyFreeTaxes.com, which provides virtual assistance for people earning $58,000 or less to file their federal and state taxes for free. This service is offered by Centraide.
The IRS also has a tool to help individuals identify other free file sites that offer tax filing assistance.
WHAT IF I LIVE OUTSIDE OF THE 50 STATES?
Although the coronavirus relief package includes child tax credit benefits for residents of Puerto Rico, they were not eligible to receive the monthly advance payments. Instead, Puerto Rican residents can receive the full child tax credit amount to which they are entitled by filing a federal tax return this year. Additionally, residents of American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, or the US Virgin Islands may be eligible for full child tax credit payment, but will need to contact their local tax agency in the US territory.
WHO CAN HELP ME FIX THIS?
The IRS has launched a website, called ChildTaxCredit.gov, which lists the criteria that filers must meet to receive full credit. Additionally, the federal agency will begin offering walk-in assistance with IRS volunteers in limited locations for people who need help filing their taxes, starting Feb. 12.
Thirty-five tax assistance centers across the country will be open from 9 a.m. to 4 p.m. on the second Saturday for the next four months.
The tax filing deadline is April 18.
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